A dragging economy, rising prices of raw material, turbulent financial markets – the electrical industry has not exactly been experiencing its heyday in the last ten years. But not all manufacturers are suffering equally under the economic situation. Among those businesses that are still shining in the market is the Miele Group. Represented on every continent since 2002, the house appliance manufacturer is recording only turnover records. The company implemented MTM processes at the right time to reduce costs and increase productivity. That way production processes could be optimized with MTM, and a complete assembly-friendly housing concept could be created.
BSH Bosch and Siemens House Appliances Ltd. are also very successful. Production-friendly product design, optimization of all production factors, consistent cost management, standardized processes at various locations, continuous improvement and activating staff know-how – optimization along the value-added chain guarantees the manufacturer an excellent competitive position.
Within the cooker plants Bosch Siemens uses MTM data systems for: determining productivity potentials, product and process benchmark, optimization of work processes, design of work systems, design of assembly-friendly products, work assignment, and determination of standard times.
Throughout the world, the application and administration of data is done with the MTM planning software TiCon®. TiCon® was first installed in local networks and is going to be consolidated in a central data base. In BSH MTM-1 and MTM-UAS are in use, depending on the method level or the length of cycle times. Some very few plants use MTM-2. MTM is being applied in plants in the following countries: Athens, Greece; Bretten, Germany; Traunreuth, Germany; Istanbul, Turkey; Montanana, Spain; Santander, Spain; Lipsheim, France; Sao Paulo, Brazil; New Bern, USA.
Braun Ltd., an international leader in the small electrical appliance branch, and Dolmar, the power saw manufacturer – both member companies of the MTM Organization – prove that businesses can be successful despite industry trends.
Whirlpool Europe: a true success story
In the late 1980’s Whirlpool, the American white goods giant company expanded its manufacturing operations all over Europe. The expansion was achieved through the acquisitions of existing individual plants mainly in Italy, France, Germany and Sweden. Their department of Organization & Efficiency at the company’s headquarters in Comerio, Italy, soon realized the problem of making a uniform assessment of the overall efficiency for the different plants. The problems stemmed principally from the fact that:
- work standards were based on different work study systems such as work factor, stop watch studies etc.
- performance measuring scales varied according to the country
- different allowance factors where being applied
- some of the work standards had become obsolete due to lack of maintenance
- there was a wide variation of I.E. skills levels
Given the complexity of the task, Whirlpool asked productivity expert Klaus Helmrich (Sweden) for the support. The project was named Factory Performance Study – Whirlpool Europe and a project team, comprising Pat Rubano (DMTM) and Gabriele Caragnano (O&E Whirlpool) was set up under the leadership of Mr. Klaus Helmrich. The objective was the establishment of the performance levels, expressed on a uniform scale, for each of eight plants located in four European countries and manufacturing different products, from refrigerators to microwave ovens.
The job was carried out by studying 9-10 comparable short work cycles in each plant. The jobs were carefully selected so that they would be representative of the department where they were carried out (primary processes, subassembly and assembly, finishing and packing) and similar, if not equal, in nature from plant to plant. Each sample job was video recorded between 3 to 20 cycles. A representative cycle was then selected based on the criteria that it was complete, executed with a consistent method, contained no disturbances and it represented the best performance. The selected work cycle was then reproduced in a continuous video sequence from 3-15 times in order to facilitate the subsequent MTM analysis and performance rating process. Each cycle was analysed with MTM-1 using the Ana-Zeba Data software (precursor to TiCon from DMTMV). The actual time for realizing the task was also recorded from the video recordings using a stopwatch. The plant own time standard corresponding exactly to the selected work cycle were collected.
Given the complexity of the task, Whirlpool asked productivity expert Klaus Helmrich (Sweden) for the support. The project was named Factory Performance Study – Whirlpool Europe and a project team, comprising Pat Rubano (DMTM) and Gabriele Caragnano (O&E Whirlpool) was set up under the leadership of Mr. Klaus Helmrich. The objective was the establishment of the performance levels, expressed on a uniform scale, for each of eight plants located in four European countries and manufacturing different products, from refrigerators to microwave ovens.
In addition, industrial engineers at each plant were asked to rate the performance from all the selected work cycles filmed in their plant and five work cycles from other plants.The data collected was then processed to determine a number of useful indexes, the most important being shown here below.
Performance scales
The characteristics of performance scales used at different plants, was evaluated with respect to the calibration, consistency and relevance indexes. In comparison to the MTM 100 norm the individual scales varied from 98 to 115.
Quality of time standards
The percentage variation of time standards was determined to be between –4% to + 36% with respect to the plant own norm scale and between +12% to +55% with respect to the MTM norm scale. As a consequence, the losses due to the quality of the time standards varied between +1% to +31%.
Active Working Time (Utilization)
To determine the variation of the utilization factor between plants, a reference figure for the available time was set as 8 hrs/day and 231 days/year. The resulting utilization factors were found to vary between plants from 61% to 86%. Having determined the foregoing figures, it became possible to calculate the potential improvement at each plant. This was accomplished by comparing the actual figures regarding performance, quality of standards and active working time (utilization) against target figures set at:
MTM average performance = 115%
Utilization factor = 85%
Losses due to quality of standards = 0
The calculation gave the following results:
| Plant |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
| Potential improvement |
60% |
26% |
47% |
71% |
6% |
74% |
65% |
47% |
As a result of this very satisfactory work Whirlpool decided to implement a 3-year intensive productivity improvement program covering all its European plants.
In the first phase, the plan called for the improvement of working methods based on:
- the elimination of waste
- low cost improvement of equipment and layouts
- minor improvements of product design
This was accomplished through the application of the Method Design Concept (MDC), a powerful improvement concept well described in the book Productivity Processes, printed and distributed by the IMD.
The 2nd phase called for the implementation of MTM as a basis for the development of work standards and the fine-tuning of methods, layouts and workplace design. Future measurements of plant performance were also to be based on the MTM norm scale. This implied:
- Training a number of I.E. resources at each plant
- The installation of a central MTM database, generated by the TiCon software, with online accessibility for all European plants
- The development of MTM standards in each plant
- The balancing of production lines based the newly developed standards
Due to variations of cycle times and the nature of the work performed at the different plants (method level variations), appropriate MTM systems were applied, namely MTM-1, Standard data (the equivalent German release of MTM-2), UAS and MEK.
The job was carried over a period of roughly 3 years and the targeted average labour cost reduction of 15% was fully achieved.
The greatest success of this experience comes from the fact that Whirlpool, having recognized the advantages of MTM, adopted it as standard practice in all its European factories. This was particularly important in Italy where the application of MTM was just starting. The installation of MTM in the five Whirlpool plants gave MTM great visibility throughout the country.
his success was further enhanced in 1997 when Whirlpool-Italy signed a national labour agreement with the concerned labour unions. The agreement called for the recognition of MTM as the standard work study system to be used in all its plants. MTM standards and the MTM performance scale were also accepted as the basis for the determination of shared incentive bonuses.